Psychosocial wellbeing is a measure of a healthy lifestyle that has three major dimensions namely: rnemotional wellbeing, social wellbeing, and resilience to changing environments. Manyrnpsychologists claim that there is a relationship between the psychosocial wellbeing of children rnand divorce. The main objective of this study is to assess the causes of divorce and psychosocial rnwellbeing of children in divorced families at Nifas Silk Lafto sub-city. Generally, economic, social, rnpsychological and emotional problems were taken as major causes of divorce which leads to the rnchildrenâ€™s wellbeing. Cross-sectional research design was used and both qualitative and rnquantitative research approaches were implemented. In this research, there were 146 study rnparticipants The data were collected using questionnaire and interview guide. It has used rndescriptive statistics with means, standard deviations, frequencies and percentages as well as rnregression analysis for finding out results. From the findings, the prevalence of psychosocial rnunwellness amongst children of divorced parents at Nifas Silk Lafto sub-city was calculated to be rn46.6% based on a scoring system developed. The most psychosocial dimension which is rncompromised was the ability to cope with new situations faced after divorce followed by emotional rnwellbeing and social wellbeing, respectively. It was found that child distress has a significant rnassociation with age, educational status, income level, and occupational status. Similarly, age, rndivorce handling age, and income level were observed to have statistically significant (p>0.05) rneffects on academic performance. These quantitative findings compliment qualitative results rnobtained from in-depth interview (IDI), focus group discussion (FGD) and key informant interview rn(KII) to collect the necessary data from target population. Regardless of its wide range rnoccurrence, divorce has not given attention by the society and other concerned bodies. Therefore, rnit is recommended that the society, social workers, the concerned government organs are advised rnto play their important role in preventing the prevalence of divorce and ensuring its proper rnadjustment through changing the social environment in relation to marriage stability.